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What Should Be Included in Not-for-Profit Bylaws?

written by: •edited by: Linda Richter•updated: 5/23/2011

Most nonprofits along with filing articles of incorporation and receiving their tax exempt status have additional documents required in most states. What else is necessary to ensure your nonprofit conforms to set laws and standards? Jean Scheid provides the answers.

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    What Is Required?

    Nonprofit Meeting Nonprofit requirements and filings vary from state to state, depending on the state’s corporation commission or public regulatory commission. Beyond submitting nonprofit articles of incorporation and filing Form 1023 with the Internal Revenue Service (IRS) for a 501(c)(3) tax exempt status, bylaws are also necessary.

    In the Bright Hub Media Gallery, you’ll find a bylaws template for nonprofit organizations you can download, and it's easily modified to meet your needs. While some charitable establishments may use general bylaws such as those for a C or S Corporation, these bylaws are distinct in that they apply directly to nonprofits.

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    How Are They Different?

    Roberts Rules of Orders Courtesy Amazon A nonprofit must follow certain rules based on the type of entity, its mission and purpose. If a nonprofit were a school for example, the bylaws would vary from those of a nonprofit religious facility. A school must list different uses of funds and committee types from that of a church, for example. Download our free template so you can follow as a typical bylaws construction is explored.

    Elements to nonprofit bylaws should be divided into Article I, II, etc. and should include:

    Name – The name and DBA of the nonprofit along with its address.

    Purpose – Describe what the purpose of the nonprofit will be in detail.

    Organization and Status – Here you will want to list how the nonprofit was formed via the articles of incorporation along with applying for an IRS tax exempt status. Some states also require nonprofits to gain tax exempt status, so check with your secretary of state or attorney general’s office on these rules.

    Membership and Voting – This article will list who is eligible to be a member or officer and voting privileges.

    Board of Directors – List the number of directors on the board that will be allowed along with assigned titles. This article also includes important elements such as duties, terms, elections, and any other information that may be relevant to your nonprofit board.

    Meetings – Here, include how, where, and when monthly and/or annual meetings will occur as well as outlining the process for special meetings. Special meetings are necessary if issues arise and the board must make a quick decision. Your bylaws also need to state how many board members need to be present to constitute a quorum and if members can appear at meetings telephonically or via proxy.

    Committees – Almost all nonprofits will have committees of some sort. These can include fundraising, selection, or grant committees and an advisory committee. List every committee you plan on creating along with assigned roles and how each member of the committee will be elected, hold meetings and when and how they will report to the board of directors.

    Finance – In a nonprofit organization, this may be the most important part of your bylaws. Most nonprofits seek grants or other types of funding and these grant proposals will ask for annual audits. Here you must determine who and when will audit the books (usually an agreed-upon outside accounting firm) as well as how financial reports will be delivered to the board and who will be responsible for those reports. The financial section of your bylaws also needs to include items such as an agreed-upon nonprofit software or bookkeeper(s) to be used, bank accounts and check-signing authority. If your board plans on investing capital dollars to grow, the person (or board director role) responsible for these investments and reports should also be mentioned. Anything and everything that has to do with money or how money will be spent or collected is key to include in this part of the nonprofit bylaws.

    Dissolution – All bylaws, whether they are nonprofit or not, must include what will happen if the nonprofit dissolves. Here you should list how nonprofit assets, accounts, and cash will be assigned and where. Remember, nonprofits only gain a 501(c)(3) status because they do not intend to make a profit. Most Corporation Commissions or Public Regulatory Commissions have requirements on the dissolution of nonprofits, so you may want to check with these organizations first on how to word the dissolution section of your bylaws.

    Amendments – Here, state how and when the bylaws can be amended. For instance, will it take a vote and, if so, what will represent a quorum for updating or amending the bylaws.

    Authority – Some bylaws include an authority section to show what form of order will be used in all board meeting such as Roberts Rules of Order. This meeting minute rule book sets exact rules on how meetings will be held including who speaks, how votes are obtained, first and seconded prior to approval by the board, among other important rules.

    Signatures – This section is simply a place for every board member to sign and accept the bylaws.

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    Tips for Creating

    Board Meeting The bylaws template provided in our Media Gallery is an excellent sample to help your charitable organization get started on the right path. Some other tips on creating your bylaws include:

    Creation – Each article contained within the bylaws should be agreed upon by all prior to signing. In order to do this, creators of the nonprofit should set aside ample time to consider each article and include everything (even if it doesn’t appear on our sample template) the organization plans to do.

    Help – Corporation Commissions will not write bylaws for a nonprofit but they often have examples you can follow. You can also seek the help of other nonprofits similar to yours such as a church or nonprofit school or particular fund. If the nonprofit has the capital, an attorney can be invaluable in creating the bylaws. Online incorporation websites such as Legal Zoom are also a way to get everything done fast including obtaining a corporate book and seal.

    New Nonprofits – No matter how hard you try and consider every article and element within your bylaws, if you are a new nonprofit, expect some amendments and, if needed, act swiftly to make them part of your bylaws. An example of an amendment may be the appointment of a new grant-writing committee.

    Accessibility – Most nonprofits serve a community, establishment or fund. Because of the nonprofit status, you should determine how and where you will keep the articles of incorporation, bylaws and all meeting minutes for review by any member of the community the nonprofit serves.

    Creating bylaws is not hard, especially with our easy-to-modify bylaws template for nonprofit organizations. If, however, you have concerns, you should check with an attorney with experience in nonprofit corporate law.

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    References

    Read More About It - Right Here on Bright Hub

    Non-Profit Entity Requirements

    Steps for Starting a Non-Profit Organization

    Additional Resources

    IRS – Form 1023

    New Mexico Public Regulation Commission

    Legal Zoom - Incorporation

    The author has served on nonprofit boards and has experience in writing bylaws.

    Image Credits

    Meeting - MorgueFile/mconnors.

    Screenshot Roberts Rules of Order courtesy of Amazon

    Board Meeting - Wikimedia Commons/DSC07151